It is essential to the rendition of a personal judgment against
a corporation that it be doing business within the state; but each
case must depend upon its own facts to show that this essential
requirement of jurisdiction exists.
The presence of a corporation within a state necessary to the
service of process is shown when it appears that the corporation is
there carrying on business in such sense as to manifest its
presence within the state, although the business may be entirely
interstate in its character.
The fact that the business carried on by a corporation is
entirely interstate in its character does not render the
corporation immune from the ordinary process of the courts of the
state.
147 Ky. 655 affirmed.
The facts, which involve the validity and sufficiency of service
of process upon a foreign corporation and the determination of
whether such corporation was doing business within the state, are
stated in the opinion.
Page 234 U. S. 582
MR. JUSTICE DAY delivered the opinion of the Court.
This case presents the question of the sufficiency of the
service of process on an alleged agent of the International
Harvester Company in a criminal proceeding in Breckenridge County,
Kentucky, in the court of which county an indictment had been
returned against the Harvester Company for alleged violation of the
antitrust laws of the State of Kentucky. The Harvester Company
appeared and moved to quash the return, substantially upon the
ground that service had not been made upon an authorized agent of
the company, and that the company was not doing business within the
State of Kentucky, and it set up that any action under the
attempted service would violate the due process and commerce
clauses of the federal Constitution. The only question involved,
says the Court of Appeals, and we find none other in the record, is
whether there was such service of process as would sustain the
judgment. The court overruled the motion, and, the case being
called for trial and the Harvester Company failing to appear or
plead, judgment by default for $500 penalty was entered against it,
which was affirmed by the Court of Appeals of Kentucky (147 Ky.
655).
It appeared that, prior to October 28, 1911, before this
indictment was returned, the Harvester Company had
Page 234 U. S. 583
been doing business in Kentucky, and had designated Louisville,
Kentucky, as its principal place of business, in compliance with
the statutes of Kentucky in that respect. It further appeared that
the company had revoked the agency of one who had been appointed
under the Kentucky statute, and had not appointed anyone else upon
whom process might be served.
It is conceded in the brief of the learned counsel for the
plaintiff in error that whether the person upon whom process was
served was one designated by the law of Kentucky as an agent to
receive summons on behalf of the Harvester Company was a question
within the province of the Court of Appeals of Kentucky to finally
determine, and no review of that decision is asked here. We come,
then, to the first question in this case, which is whether, under
the circumstances shown in this case, the Harvester Company was
carrying on business in the State of Kentucky in such manner as to
justify the courts of that state in taking jurisdiction of
complaints against it.
For some purposes, a corporation is deemed to be a resident of
the State of its creation; but when a corporation of one state goes
into another, in order to be regarded as within the latter, it must
be there by its agents authorized to transact its business in that
state. The mere presence of an agent upon personal affairs does not
carry the corporation into the foreign state. It has been
frequently held by this Court, and it can no longer be doubted,
that it is essential to the rendition of a personal judgment that
the corporation be "doing business" within the state.
St. Louis
S.W. Ry. v. Alexander, 227 U. S. 218,
227 U. S. 226,
and cases there cited. As was said in that case, each case must
depend upon its own facts, and their consideration must show that
this essential requirement of jurisdiction has been complied with,
and that the corporation is actually doing business within the
state.
In the case now under consideration, the Court of Appeals
Page 234 U. S. 584
of Kentucky found, with warrant for the conclusion, that the
Harvester Company's method of conducting business might be shown to
the best advantage from the general instruction of the company to
its agents, of date November 7, 1911, as follows:
"The company's transactions hereafter with the people of
Kentucky must be on a strictly interstate commerce basis. Travelers
negotiating sales must not hereafter have any headquarters or place
of business in that state, but may reside there."
"Their authority must be limited to taking orders, and all
orders must be taken subject to the approval of the general agent
outside of the state, and all goods must be shipped from outside of
the state after the orders have been approved. Travelers do not
have authority to make a contract of any kind in the State of
Kentucky. They merely take orders to be submitted to the general
agent. If anyone in Kentucky owes the company a debt, they may
receive the money, or a check, or a draft for the same, but they do
not have any authority to make any allowance or compromise any
disputed claims. When a matter cannot be settled by payment of the
amount due, the matter must be submitted to the general collection
agent, as the case may be, for adjustment, and he can give the
order as to what allowance or what compromise may be accepted. All
contracts of sale must be made f.o.b. from some point outside of
Kentucky, and the goods become the property of the purchaser when
they are delivered to the carrier outside of the state. Notes for
the purchaser when may be taken, and they may be made payable at
any bank in Kentucky. All contracts of any and every kind made with
the people of Kentucky must be made outside of that state, and they
will be contracts governed by the laws of the various states in
which we have general agencies handling interstate business with
the people of Kentucky. For example, contracts
Page 234 U. S. 585
made by the general agent at Parkersburg, West Virginia, will be
West Virginia contracts."
"If any one of the company's general agents deviates from what
is stated in this letter, the result will be just the same as if
all of them had done so. Anything that is done that places the
company in the position where it can be held as having done
business in Kentucky will not only make the man transacting the
business liable to a fine of from $100 to $1,000 for each offense,
but it will make the company liable for doing business in the state
without complying with the requirements of the laws of the state.
We will therefore depend upon you to see that these instructions
are strictly carried out."
Taking this as the method of carrying on the affairs of the
Harvester Company in Kentucky, does it show a doing of business
within that state to the extent which will authorize the service of
process upon its agents thus engaged?
Upon this question, the case is a close one, but upon the whole,
we agree with the conclusion reached by the Court of Appeals, that
the Harvester Company was engaged in carrying on business in
Kentucky. We place no stress upon the fact that the Harvester
Company had previously been engaged in doing business in Kentucky,
and had withdrawn from that state for reasons of its own. Its
motives cannot affect the legal questions here involved. In order
to hold it responsible under the process of the state court, it
must appear that it was carrying on business within the state at
the time of the attempted service. As we have said, we think it
was. Here was a continuous course of business in the solicitation
of orders which were sent to another state, and in response to
which the machines of the Harvester Company were delivered within
the State of Kentucky. This was a course of business, not a single
transaction. The agents not only solicited such orders
Page 234 U. S. 586
in Kentucky, but might there receive payment in money, checks,
or drafts. They might take notes of customers, which notes were
made payable, and doubtless were collected at any bank in Kentucky.
This course of conduct of authorized agents within the state, in
our judgment, constituted a doing of business there in such wise
that the Harvester Company might be fairly said to have been there,
doing business, and amenable to the process of the courts of the
state.
It is argued that this conclusion is in direct conflict with the
case of
Green v. Chicago, Burlington & Quincy Ry.,
205 U. S. 530. We
have no desire to depart from that decision, which, however, was an
extreme case. There, the railway company, carrying on no business
in Pennsylvania other than that hereinafter mentioned, and having
its organization and tracks in another state, was sought to be held
liable in the Circuit Court of the United States for the Eastern
District of Pennsylvania by service upon one Heller, who was
described as an agent of the corporation. As incidental and
collateral to its business proper, the company solicited freight
and passenger traffic in other parts of the country than those
through which its tracks ran. For that purpose it employed Heller,
who had an office in Philadelphia, where he was known as district
freight and passenger agent, to procure passengers and freight to
be transported over the company's line. He had clerks and traveling
passenger and freight agents who reported to him. He sold no
tickets and received no payment for the transportation of freight,
but took the money of those desiring to purchase tickets, and
procured from one of the railroads running west from Philadelphia a
ticket for Chicago and a prepaid order which gave the holder the
right to receive from the company in Chicago a ticket over its
road. Occasionally he sold to railroad employees, who already had
tickets over intermediate lines, orders for reduced rates over the
company's line.
Page 234 U. S. 587
In some cases, for the convenience of shippers who had received
bills of lading from the initial line for goods routed over the
company's line, he exchanged bills of lading over its line, which
were not in force until the freight had been actually received by
the company. Summarizing these facts, Mr. Justice Moody, speaking
for the Court, said (p.
205 U. S.
533):
"The business shown in this case was in substance nothing more
than that of solicitation. Without undertaking to formulate any
general rule defining what transactions will constitute 'doing
business' in the sense that liability to service is incurred, we
think that this is not enough to bring the defendant within the
district so that process can be served upon it."
In the case now under consideration, there was something more
than mere solicitation. In response to the orders received, there
was a continuous course of shipment of machines into Kentucky.
There was authority to receive payment in money, check, or draft,
and to take notes payable at banks in Kentucky.
It is further contended that, as enforced by the decision of the
Kentucky court, the law, in its relation to interstate commerce,
operates to burden that commerce. It is argued that a corporation
engaged in purely interstate commerce within a state cannot be
required to submit to regulations such as designating an agent upon
whom process may be served as a condition of doing such business,
and that, as such requirement cannot be made, the ordinary agents
of the corporation, although doing interstate business within the
state, cannot by its laws be made amenable to judicial process
within the state. The contention comes to this: so long as a
foreign corporation engages in interstate commerce only, it is
immune from the service of process under the laws of the state in
which it is carrying on such business. This is indeed, as was said
by the Court of Appeals of Kentucky, a novel proposition, and we
are unable to
Page 234 U. S. 588
find a decision to support it, nor has one been called to our
attention.
True, it has been held time and again that a state cannot burden
interstate commerce or pass laws which amount to the regulation of
such commerce; but this is a long way from holding that the
ordinary process of the courts may not reach corporations carrying
on business within the state which is wholly of an interstate
commerce character. Such corporations are within the state,
receiving the protection of its laws, and may, and often do, have
large properties located within the state. In
Davis v.
Cleveland, C.C. & St.L. Ry., 217 U.
S. 157, this Court held that cars engaged in interstate
commerce and credits due for interstate transportation are not
immune from seizure under the laws of the state regulating
garnishment and attachment because of their connection with
interstate commerce, and it was recognized that the states may pass
laws enforcing the rights of citizens which affect interstate
commerce but fall short of regulating such commerce in the sense in
which the Constitution gives sole jurisdiction to Congress, citing
Sherlock v. Alling, 93 U. S. 99,
93 U. S. 103;
Johnson v. Chicago & Pacific Elevator Co.,
119 U. S. 388;
Kidd v. Pearson, 128 U. S. 1,
128 U. S. 23;
Pennsylvania R. Co. v. Hughes, 191 U.
S. 477, and
The Winnebago, 205 U.
S. 354,
205 U. S. 362,
in which this Court sustained a lien under the laws of Michigan on
a vessel designed to be used in both foreign and domestic
trade.
In
International Textbook Co. v. Pigg, 217 U. S.
91, it is said, it was held that a law of Kansas which
required the filing by a foreign corporation engaged in interstate
commerce of a statement of its financial condition as a
prerequisite of the right to do such business, and which required a
certificate from the Secretary of State showing that such
statements had been filed as a condition precedent to the right of
the corporation to maintain a suit in that state, was void. But
that case did not hold, as we should be
Page 234 U. S. 589
required to do to sustain the contention of the plaintiff in
error in this case, that the fact that the corporation was carrying
on interstate commerce business through duly authorized agents made
it exempt from suit within the state by service upon such
agents.
We are satisfied that the presence of a corporation within a
state necessary to the service of process is shown when it appears
that the corporation is there carrying on business in such sense as
to manifest its presence within the state, although the business
transacted may be entirely interstate in its character. In other
words, this fact alone does not render the corporation immune from
the ordinary process of the courts of the state.
It follows that the judgment of the Court of Appeals of Kentucky
must be
Affirmed.